FACT CHECK: Looming tax hike not the biggest ever

FILE - In this Feb. 15, 2012, file photo, House Majority Leader Eric Cantor of Va., accompanied by fellow GOP leaders House Speaker John Boehner of Ohio, Rep. Cathy McMorris Rodgers, R-Wash., Cantor, and House Majority Whip Kevin McCarthy, R-Calif., gestures during a news conference on Capitol Hill in Washington, to discuss the payroll tax cut negotiations. Republicans are calling it "Taxmageddon," the big tax increase awaiting nearly every American family at the end of the year, when a long list of tax cuts are scheduled to expire unless Congress acts. GOP leaders in Congress claim it would be "the largest tax increase in American history." Except it wouldn’t be, not when you take into account the big tax increases used to help pay for World War II. (AP Photo/J. Scott Applewhite, File)
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FILE - In this Feb. 15, 2012, file photo, House Majority Leader Eric Cantor of Va., accompanied by fellow GOP leaders House Speaker John Boehner of Ohio, Rep. Cathy McMorris Rodgers, R-Wash., Cantor, and House Majority Whip Kevin McCarthy, R-Calif., gestures during a news conference on Capitol Hill in Washington, to discuss the payroll tax cut negotiations. Republicans are calling it "Taxmageddon," the big tax increase awaiting nearly every American family at the end of the year, when a long list of tax cuts are scheduled to expire unless Congress acts. GOP leaders in Congress claim it would be "the largest tax increase in American history." Except it wouldn’t be, not when you take into account the big tax increases used to help pay for World War II. (AP Photo/J. Scott Applewhite, File)
/ AP

In all, federal taxes would increase by about $423 billion next year, according to figures from the nonpartisan Congressional Budget Office and the Joint Committee on Taxation, the official scorekeepers for Congress.

Combined with federal spending cuts scheduled to take effect next year, the one-two punch would probably send the U.S. economy back into recession, according to a recent CBO study.

Still, the tax increases would pale in comparison to those imposed to help finance World War II.

Before the 1940s, the individual income tax applied to only a small percentage of the population. By the end of war, the income tax was levied on most working people, with a top tax rate of 94 percent on income above $200,000.

By comparison, the current top rate is 35 percent, on taxable income above $388,350. If Congress does nothing, the top rate would return to 39.6 percent next year - the same rate that was in place for most of the 1990s.

In dollars, next year's tax hikes would be the biggest. But the population is more than twice as big as it was in the 1940s and the size of the U.S. economy is 80 times bigger. That's why economists usually measure taxes and government spending as a share of the economy.

The 1942 tax increase represented more than 5 percent of the U.S. economy, as measured by the gross domestic product, or GDP. The 1941 tax increase was 2.2 percent of GDP, according to a Treasury Department paper published in 2006.

Next year's looming tax increase would represent 2.6 percent of GDP - a huge tax hike but not the biggest.

By comparison, next year's potential tax hike would increase federal revenues by 16 percent, according to CBO.

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ROMNEY: "President Obama has failed to even pass a budget. In February, he put forward a proposal that included the largest tax increase in history, and still left our national debt spiraling out of control, and the House rejected it unanimously," Romney said in an April 4 speech to newspaper executives and editors.

ROMNEY AGAIN: "Rapidly rising federal spending and debt threatens our economic future, and the president has responded by proposing the largest tax increase in history," Romney said in a Feb. 22 release.

THE FACTS: Obama's budget proposal would represent one of the largest tax increases since World War II, if you count letting the payroll tax cut expire as a tax increase. But again, it wouldn't be the largest ever. Obama's 2013 budget proposal mixes tax cuts designed to improve the economy with long-term tax increases aimed at reducing the federal budget deficit.

Obama has proposed extending Bush-era tax cuts for families making less than $250,000 and ending them for families that make more. He would end tax breaks for oil and gas companies but make permanent the research and development tax credit.